Big Game hunting distributors, bag cash!

If you haven’t been on Safari in a while you will see really big elephants (elephants= really big non producing inventory…and some gazelles) you might be surprised at what you might find. You are looking for product that can be converted to cash.

Why hunt for cash? You need it now. Banks are not exactly pushing money at most distributors.

As you search for that elusive big game (CASH) in your game preserve (aka your warehouse) you’ll want to look on top of the shelves, behind boors, in old boxes that are back in a corner or maybe they are out in a remote storage. Or maybe it’s on your delivery trucks or underneath stacks of old paper reports. While you are at it look in your sales person’s trunk. Check your computer and see where all the samples are. Get your arms around it.

If’ you have a process for defective products, check that bin or area where you store it. Suggest you turn that over to the manufacturer and get the credit back ASAP. I suggest that you get credit or cash as opposed to replacement product. It will depend on the manufacturer.

How about lost inventory that never got logged into you system or product that you wrote off and still have in the warehouse? As to that lost inventory that didn’t make it into inventory, you may not remember that it screwed up your cycle count and service levels. You probably ended up ordering extra product, which in turn caused you to invest more money in your inventory. Hopefully it is still moving like a gazelle and you are getting paid for it. If it has moved into the slow moving (elephant category) then you need a plan to turn it into cash. But you have to find it first.

What to do with that elephant inventory? You’ve probably sent back as much inventory to the manufacturer as they’ll take for now. We are not suggesting that you dump the inventory, but rather start a process that let’s you sell of that portion of the inventory out of your market.

Some suggestions:
• If you are in a buying group, have some discussions with distributors out of your market about letting them sell and you ship product to their customers. I know there will be some manufacturers who will be up in arms. But unless you have a contract to keep certain products on the shelf and you are properly compensated in a timely fashion, co-sales may be the way for you to generate some cash.
• E-Bay may be a viable place for you to get some cash out of at least a portion of your elephant inventory.
• While no one likes to talk about it there are gray market buyers who for years have been buying manufacturer production over runs. Here again you need to satisfy yourself that this product is not going to come back and bite you like a poisonous snake named ‘cheap price’.
• Along with the gray market buyer, you might consider a pre-arranged auction. For this to work, you should move the product off site and be as quiet as possible about the auction. This is not where you should invite your customers to come bid on it, particularly if you plan on staying in business in that market area.
• Consider talking to an exporter. The trick here is to make sure you get paid here in the USA before you ship.

Just remember this business is all about the cash. So get out on safari in your warehouse and find product that can be converted to cash.